The Government has accepted the key recommendations of its Review of Small Amount Credit Contracts, setting the scene for a regulatory overhaul of the payday lending and consumer leasing markets.The Minister for Revenue and Financial Services, Kelly O'Dwyer, said the Government would extend the protected earnings amount regulation and cap consumer lease charges. Under the current rules total SACC repayments cannot exceed 20 per cent of gross income for Centrelink recipients. In line with the review panel's recommendation, the cap will be reduced to ten per cent of net income each repayment period and apply to all consumers.The National Credit Providers Association, which represents small amount lenders, campaigned against the changes to the protected earnings rule, arguing it would result in longer loan terms and higher total repayments."This recommendation fails to understand the pricing structure and related cost impact on consumers," the NCPA said in its submission to the review.The existing ban on credit contracts with terms of less than 15 days will be maintained.Costs charged for early repayment will be removed and SACC providers will be prohibited from making unsolicited offers.Under current rules there is no limit on the price that can be charged for a consumer lease. The review panel said this resulted in high charges and it recommended that consumer leases be subject to a cap on total repayments.The Government accepted the review panel's cap formula, which is a multiple of the base price of the goods, determined by adding four per cent of the base price for each whole month of the lease term to the amount of the base price. For a lease with a term of more than 48 months the term will be deemed to be 48 months for the purposes of calculating the cap.This would result in a total repayment of 1.48 times the base price for a 12-month lease, 1.96 times the base price for a two-year lease and 2.92 times the base price for a lease of four years or more.The rule requiring SACC providers to obtain and consider 90 days of bank statements before providing a loan has been retained and extended to lease providers. The review panel made 24 recommendations, covering penalties, warnings, statements and disclosures, handling of customer's banking details, suitability assessments, default and early repayment fees and marketing.The Government accepted 14 of the recommendations in full. Six recommendations were accepted "partially" or "with amendment", one was supported "in principle", one was "noted" and two were rejected.The Government rejected a recommendation that an SACC provider should not receive a payment or any other benefit for a referral made to another SACC provider, saying there were instances where it may be appropriate to make a referral.And it rejected a recommendation that SACC providers should only be permitted to charge a default fee that represents their actual costs arising from a default, up to a maximum of $10 per week, opting to stay with the existing default cap of twice the adjusted credit amount.The NCPA's view is that the